May 3 (Bloomberg) -- Defense Secretary Chuck Hagel said
he’s still reviewing options that may avert furloughs more than
three months after the Pentagon said automatic budget cuts may
require unpaid leave for as many as 750,000 civilian workers.

“We are examining every option for responsible cuts in
order to minimize or possibly eliminate the necessity of
furloughs,” Hagel said in a letter to Representative James
Lankford. “However, furloughs may be necessary during sequester
to assure that the funding for our warfighters and readiness
meet mission requirements.”

The April 26 letter to Lankford, an Oklahoma Republican who
serves on the House Budget Committee, reflects conflicting views
of the need for furloughs among the military services -- the
Navy says it doesn’t need them -- as well as the Pentagon’s
changing fiscal outlook under the cuts called sequestration.

Deputy Defense Secretary Ashton Carter first warned in
January that the Pentagon’s civilian employees “all over the
country” may face forced days off.

Pentagon spokesman George Little told reporters today that
Hagel “remains in discussions with his senior team” and
expected a decision to come “very soon.” General Martin
Dempsey, chairman of the Joint Chiefs of Staff, told reporters
this week that furlough notices might not go out until late May
to coincide with completion of a “strategic choices” review
that Hagel has ordered.

Furloughs already have begun for other federal agencies,
including the White House staff. Congress moved last month to
let the Federal Aviation Administration move around funds to
stop furloughs of air-traffic controllers that forced delays at
the nation’s largest airports and provoked anger from travelers.

Navy’s Stance

Navy officials have told lawmakers they believe their
service can find enough savings to forestall furloughs for any
of its 170,000 civilian employees, including 30,000 shipyard
workers who maintain vessels, according to two people familiar
with the private communications who asked not to be identified
discussing them.

The service is awaiting final guidance from Pentagon
officials, Navy Lieutenant Commander Chris Servello said.

Navy officials may be questioned about their furlough views
during a hearing of the House defense appropriations
subcommittee on May 7.

For the Air Force, “civilian furlough is still on the
table,” spokeswoman Ann Stefanek said in an e-mailed statement.

“The Air Force will make notifications once directed to do
so by the Department of Defense,” she said. “We expect
approximately 180,000 Air Force civilians” -- the entire
workforce -- “to be affected,” she said.

Army’s Plans

George Wright, an Army spokesman at the Pentagon, said
“civil service employees expect to be notified in mid-May of 14
days of furlough that would begin in mid-June, which would last
through the end of the fiscal year.”

Wright said that, as of today, the Army planned to furlough
about 251,000 of about 330,000 civilian workers.

Among those exempted are employees in Afghanistan or those
paid with administrative funds paid to the U.S. by allies as
part of foreign military sales. Also exempted are Army employees
who perform intelligence work and are paid out of the national
intelligence budget.

The Pentagon now estimates that it will need to cut $37
billion in the fiscal year that ends Sept. 30, down from $41
billion previously projected, after the White House Office of
Management and Budget completed recalculations based on a
spending bill passed by Congress and signed by President Barack
Obama on March 26.

Shifting Funds

While most of the federal government received stopgap
funding that continued at the previous year’s levels, the
Pentagon won more flexibility through inclusion of a full
appropriations measure.

Based on the revised funding, Pentagon officials said in
March that they would reduce planned furloughs to 14 days
through September from the 22 days previously estimated, with
the goal of saving $2.5 billion from the unpaid leave.

Separately, the Pentagon is in the final stages of drafting
a request to Congress to permit the shift of $7.5 billion from
lower priority programs and into operations and maintenance, the
most permitted for such a reprogramming, according to a Pentagon
official who asked not be identified discussing the request
because it hasn’t been made public.